Merrill Lynch’s Canadian Housing Report - Hogwash
Saskatchewan’s housing industry was taken by surprise when a Merrill Lynch report on Canadian housing predicted markets in western Canadian provinces were headed for a steep decline. The Canadian Homebuilders Association and the Canadian Mortgage and Housing Corporation are refuting MER’s claim that homes in Regina and Saskatoon are overvalued by almost 50%. Both Canadian outfits say MER did not take into account the region’s economic realities.
According to CHBA, Saskatchewan has a very balanced market offering choices and opportunities for home buyers, bearing in mind that Saskatchewan, Alberta and Manitoba where most of the nation’s commodities originate are still leading Canada in GDP growth.
Claims made in the MER report that house prices in Regina are over four times the average yearly household income are simply false. A CHBA spokesperson points out that prices are currently 2 and a ½ times the average annual income (of a little over C$100K), which when factored in with debt servicing ratios, is well within the acceptable range. If anything the industry recognizes that Saskatchewan is facing a shortage of multi-family condominium-style townhouses for lower income consumers.
CMHC Prairie region agrees the economic factors in the region support the current housing market and attests to an increase in the number of potential home buyers partly boosted by the 3K new immigrants to the Province this year.